GLOBAL MARKETS-Stocks edge down as investors hit pause, watch bond yields

(Updates prices, details, adds Fed's Brainard comments)
By Suzanne Barlyn
NEW YORK, March 2 (Reuters) - Global equity markets were
little changed on Tuesday as Wall Street retreated and investors
paused to gauge whether a bond yield jump had run its course,
taking stock of gains from Monday's surge.
The subdued performance of the three major Wall Street
indices followed a flat close in Europe and slipping shares in
Asia.
"It was such a strong opening to the month yesterday that
investors could be short-term focused and saying, 'Let's take
some of the profits that we saw yesterday,'" said Sam Stovall,
chief investment strategist at CFRA Research in New York.
March began with a bang on Monday as global equities markets
rose, the S&P 500 had its best day since June 5 and bond markets
calmed after a month-long selloff. L2N2KZ2XP
In Tuesday late-afternoon trading, the Dow Jones Industrial
Average .DJI rose 45.37 points, or 0.14%, to 31,580.88, the
S&P 500 .SPX lost 3.1 points, or 0.08%, to 3,898.72 and the
Nasdaq Composite .IXIC dropped 106.23 points, or 0.78%, to
13,482.60.
The pan-European STOXX 600 index .STOXX rose 0.19% while
MSCI's gauge of stocks across the globe .MIWD00000PUS %.
Emerging market stocks rose 0.05%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.16%
lower, while Japan's Nikkei .N225 lost 0.86%.
The European Central Bank should expand bond purchases or
even increase the quota earmarked for them if needed to keep
yields down, ECB board member Fabio Panetta said on Tuesday,
after weeks of steady increases in borrowing costs. Australia's central bank on Tuesday affirmed its pledge to
keep interest rates at historic lows as policymakers battle to
stop surging bond yields from disrupting the country's
surprisingly strong economic recovery. After a sharp selloff last week, U.S. Treasuries have
stabilized with bond market indicators and derivatives
positioning pointing to near-term calm. But an improving economy
could trigger another slide in their prices. U.S. Federal Reserve Governor Lael Brainard said she was
closely watching bond markets and would be concerned if a recent
rise in yields continued and began to constrain economic
activity.
"Some of those moves last week and the speed of the moves
caught my eye," Brainard said on Tuesday. A Treasuries selloff last week pushed the 10-year yield
US10YT=RR to a one-year high of 1.614%. Benchmark 10-year
notes US10YT=RR last rose 11/32 in price to yield 1.4102%,
from 1.446% late on Monday.
Gold prices rose, inching up from a more than eight-month
low, as a retreat in the dollar and U.S. Treasury yields lifted
demand for the safe-haven metal. Spot gold XAU= added 0.8% to $1,736.02 an ounce. U.S. gold
futures GCv1 settled up 0.6% at $1,733.60.
The dollar index =USD fell 0.318%, with the euro EUR= up
0.37% to $1.2092.
Earlier, the dollar was up for a fourth consecutive day
after the spike in bond yields challenged the market consensus
for dollar weakness in 2021. But riskier currencies rose as bond
markets calmed and stocks recovered. Bitcoin BTC=BTSP fell 2.19% to $47,808.00 after rising
nearly 7% on Monday.
Shares in mainland China and Hong Kong fell overnight after
a top regulatory official expressed concerns about the risk of
bubbles bursting in foreign markets. Oil prices largely shrugged off expectations that OPEC would
agree to raise oil supplies at a meeting this week.
The global oil market is rebalancing after damage to demand
wrought by the COVID-19 pandemic was met with curbs on output by
OPEC producers, the group's president said. The industry is recovering from a collapse in demand
triggered by the pandemic, but U.S. shale production will not
recover to pre-pandemic levels, Occidental Petroleum Chief
Executive Vicki Hollub said on Tuesday. "The recovery is looking really good to us. If you look at
what's happening in India as well as the U.S., I think the oil
industry is looking like things will be pretty good for us over
next couple of years," Hollub said.
U.S. crude futures CLc1 settled down 89 cents at $59.75 a
barrel, while Brent futures LCOc1 fell 99 cents to settle at
$62.70 a barrel.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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